US Air Goes After Delta

Updated from 2:10 p.m. EST

US Airways (LCC Quote) has proposed an unsolicited $8 billion merger with bankrupt Delta Air Lines (DALRQ Quote), a deal that, if completed, would likely create the world's largest carrier.

The Tempe, Ariz.-based airline, formed in a smaller transaction just 14 months ago, said Wednesday that a merger would generate $1.65 billion in annual savings and benefits. More than half of the savings would be lost if Delta leaves bankruptcy as a standalone carrier, because it would forego the right to reject leases under bankruptcy law, US Airways said.

In total, US Airways offered $4 billion in cash and $4 billion in US Airways stock to Delta's unsecured creditors. ...